Enter product cost and selling price to see your real profit
What is dropshipping profit margin?
Dropshipping profit margin is the percentage of your selling price you keep after paying every cost: product, shipping, platform fees, advertising, and refunds. Most beginners calculate a simplified version that ignores payment processing (Shopify charges 2.9%+$0.30), marketplace commissions (Amazon takes up to 15%), and the slow drain of return requests. The result looks profitable on paper but leaves the business cash-negative after the first bad week of ads.
The full dropshipping margin calculation works like this:
For example, a product that costs $8 with $3 shipping, a $5 CPA, and a Shopify fee of 3.9%+$0.30 sold at $30 with a 3% return rate yields a net profit of $11.63—a 38.8% margin. Drop the price to $25 and you are left with $6.98 (27.9%). The break-even price in that setup is $17.51—below that, every sale loses money regardless of how many units you move. Use the Markup and Margin Calculator to model gross margin targets across your product catalog.
How to use this calculator
Enter your product and platform details. Input your product cost, selling price, and shipping cost per unit, then select your selling platform. Shopify applies 3.9%+$0.30 (payment processing plus transaction fee), Amazon 15%, eBay 13.25%+$0.30, and Etsy 9.5%+$0.45. Choose Custom to enter your own fee percentage.
Add your ad spend. Expand the Ad Spend and Returns section. In CPA mode, enter what you spend to acquire one customer. Switch to CPC + CVR mode if you know your cost per click and store conversion rate instead—the calculator derives CPA automatically using the formula CPA = CPC / (CVR / 100).
Set your returns rate. Enter the percentage of orders you expect to refund or return. Even 3% erodes margin meaningfully at scale—most dropshippers see 2–5% return rates depending on category. Electronics and apparel run higher.
Set your monthly order volume. Enter how many orders you expect per month. The Monthly Projection section shows your total revenue, required ad budget, and net profit at that volume. A $10 net profit per unit at 200 orders is $2,000 per month—scale the number to plan ad spend before launching.
Results update in real time as you type. The Break-Even Price is your minimum viable listing price given your current cost structure and ad spend.